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Dion Hinchcliffe

Social Business and Next-Generation CIOs - The Impact of Technological Change

The rate of change in the IT industry has increased dramatically in recent years, just as overall technological change has moved ahead even faster. Such is the pace that it's been imposing a disruptive forward drag on enterprises for several years now. This has become a critical driving factor in particular with the emerging discipline of social computing.

In my recent post on social business and the challenges currently facing modern CIOs, I explored the macro conditions that are altering the competitive landscape amid major changes in expectations by internal and external stakeholders.

While the role of CIOs itself has been evolving in recent years to focus more and more on top-of-line business concerns, technology is the means through which much of a CIO's goals are ultimately accomplished. The possibilities they can unleash must be understood and absorbed. Specifically, however, it's the Web itself and associated industries (such as open source) that have been having the largest overall impact on enterprise technology in the last half decade. In fact it's the premise of this series of posts that social business, with its origin and strong roots in the Internet, that heralds a new way of thinking about, organizing, and operating our institutions.

External and internal factors driving social business transformation

Current developments in social tools and technologies-- and almost certainly future advancements as well -- are thus primarily coming from the online world. CIOs will either be 1) responding in reactive mode to the influx of these tools flowing in from the margins and silos of the company, or 2) getting in front of them and guiding their situation in the organization in a meaningful and constructive way. The latter can be difficult and sometimes requires deep insight, while the former is the default stance and is easier and more common. Both routes can lead to successful outcomes however, though one is probably more effective than the other.

As we'll see below, the stage for social business is being set today by an increase in shadow IT and related grassroots adoption of social technology. These are being driven by closely associated developments in SaaS and cloud computing. This situation is often forcing the social computing discussion when it might not happen on its own. While some organizations are just ignoring the issue or actively clamping down, as social computing becomes increasingly relevant to the way businesses work, it's often turning into a beneficial activity that is starting to be called social business.

While marketing, customer service, and product development are most often on the front lines of the social business discussion (with social media marketing, social CRM, and open innovation/crowdsourcing respectively), I often encounter organizations that are using more horizontal tools as well including enterprise social networks, and wikis in local and departmental situations. Adoption, however, is still ad hoc, experimental, local, or one-off, and not yet strategic in many cases despite the growing list of benefits.

Yet the writing is on the wall when it comes to the overall numbers of workers using social tools in business related contexts. All of this paints an opportunity, and perhaps a dilemma, for CIOs that are already challenged with overseeing so many large areas of responsibility that combines operations and new business initiatives with modernization, upgrades, and restructuring.

So even though CIOs typically delegate technical decision making to subordinates that are more familiar with the details, the technology changes list here are imposing a vital new agenda within most organizations today, whether they are in the private sector, government or non-profits/NGOs.

The Impact of Technology on Social Business in the Enterprise

In 2010 and beyond, CIOs will find that the following technology related trends will have an major enterprise-level impact on business-related decisions, opportunities, and risks. Successful next-generation CIOs will go well beyond merely coping with these trends and proactively taking advantage of them to drive new and better business outcomes.

Cloud computing driving IT transformation. Still in its early stages and with most enterprises still exploring the technology in private cloud settings, cloud computing is positioned to become a major force in remaking the IT landscape. Cloud computing offers the potential for significant advantages that include cost reduction, operational agility, capturing innovation, and introducing the latest architectural and technology advantages. It's also the delivery model for Software-as-a-Service, a fast growing $7.5 billion industry last year (in a business software market of about $70 billion.) SaaS is also the delivery model of popular social networking services like Twitter and Facebook and the many enterprise-class versions of these same services. As a result, as enterprises move to cloud services they will also find that they form an easy on ramp to newer application models that have social computing capabilities and make software adoption easier in general, with implications that we'll see below. Cloud computing adoption will therefore foster social computing adoption.

Enterprise vendors adding social layers to their products. We're also beginning to see major enterprise software companies either add social features to their existing products, incorporate them broadly in their infrastructure, or offer their own standalone social software products. Notable examples, respectively, include the extensive social features that have been added to Microsoft's SharePoint 2010, Salesforce's deep integration of Chatter into its SaaS platform, or SAP's new 12Sprints offering.

Mobile devices becoming a hub for social computing. Mobile devices are positioned to become as important for business computing as desktops and servers, if they haven't already. With mobile devices, especially smartphones, becoming the nexus of communication for business users, the rapid influx of powerful social computing features into the basic capabilities of mobile devices puts traditional channels such as e-mail, IM, and SMS on equal footing with social capabilities. Not the mobile devices are just another location in which to participate in enterprise social networking. Rather, the latest mobile devices do more than just add social features, they bring with them the ability to create potent new business solutions that use the unique hardware capabilities of mobile combined with social. Understanding this means that CIOs can envision business solutions that are directly connected to their entire workforce and take advantage of location, presence, two-way digital media, and more. A couple of good though early examples of this are Cisco's WebEx on the iPhone or Insight, a collaborative project management app. While individual apps usually won't be strategic by themselves, in the very near future successful mobile enterprise strategies will have significant revenue and performance implications -- particularly in the social business realm. CIOs will need to incorporate all of this into their core concerns accordingly.

Social computing (aka Enterprise 2.0) arriving en masse in the workplace. I noted last year that 2009, based on the available data, was the year that we've broadly begun moving towards enterprise social computing, sometimes referred to as Enterprise 2.0. While near-term social computing goals will be focused on initial social business benefits such as better collaboration, expertise location, and customer engagement scenarios, there's a significantly broader agenda with the full social business model "stack", which we'll explore in the final post in this series. The key point here is that social computing isn't a future state, it's now present in most enterprises today in some form and is moving towards becoming pervasive in the near future. Leveraging this fact strategically can enable real business benefits and ignoring this trend can potentially have downsides in terms of both missed opportunity and outright exposure to risk.

The rise of shadow IT and grassroots social tools. More and more software is being acquired and managed by the business side and not IT. This is happening at a department and division level and it's happening with individual IT users, who have easy access to SaaS via the Web at work and through their own private IT devices, including laptops and mobile phones. Combined with the high failure rates of "big bang" IT, and you have a recipe for bottom-up, local IT. I explored this topic in depth recently because it's going to be an increasingly significant issue for CIOs to manage to in the future, or at least affect in a positive way. More specific to the subject of social business, my research has indicated that encouraging and building on top of grassroots adoption is a leading pattern for success. This is contrary to how most organizations go about being successful with new IT initiatives and CIOs must take note.

The Web as a source of tech innovation and social business models. When it comes to software and IT, the Web is setting the pace in terms of new advances, both technically and in terms of proving out and establishing next-generation business models.

The bottom line: The 21st century enterprise will have a technology landscape that resembles today's Web much more than most business leaders are presently aware of today, or even willing to accept. As social computing enters the workplace -- and gets turned into social business it will be smart leaders in the organization that understand how these new technologies -- particularly social ones -- will play a key role as will the seemingly endless series of advances in the space. The most effective CIOs will also understand how to effect positive change in a decentralized way by taking advantage of social business technology trends: They can use social business to generate genuine bottom-line benefits and foster highly competitive businesses that truly engage their workers and the marketplace.

What other technological changes do you see creating social business opportunities in organizations today?

I do think today's shadow IT phenomenon is very similar indeed to the PC revolution of the 1980s in terms of the drivers. As for how it's manifested, I think it's even more disruptive since the barrier to adopting alternative IT solutions via the Web is just about nil in terms of both effort and cost.

The crux of the problem is what you alluded to: How to avoid hidden inefficiencies while taking advantage of the initiative and innovation that emergent IT can enable. This is where CIOs can play a major role I believe. They can guide the direction of the organization and prescribing rules of engagement that will enable business units to act more autonomously and solve many problems locally, rather that wait for big, one-size-fits-all solutions from central IT.

How this will eventually play out is likely to be one of the most interesting IT stories in the 2nd decade of this century.

Dion Hinchcliffe

Dion Hinchcliffe is an internationally recognized business strategist and enterprise architect who has worked for more than 20 years bringing innovative solutions to clients in the Global 2000, federal government and Internet startup community. He is a frequent keynote speaker on emerging technology and business topics and, as president and CTO of Hinchcliffe & Company, he is a well-known author, blogger, and consultant on Web 2.0, Enterprise 2.0, SOA, and next-generation business. He is co-author of "Web 2.0 Architectures" (O'Reilly, 2009), and he founded and operates the Web 2.0 University,. He can be reached at dion@hinchcliffeandco.com and on Twitter at http://twitter.com/dhinchcliffe. View more

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